The Irish-bred four-year-old (9/1) finished the two miles too strongly for Godolphin's Crime Scene (40/1), romping home with three-quarters of a length to spare.
South African-trained Mourilyan (20/1) was another one-and-a-half lengths away in third.
The win was a major triumph for Australian jockey Corey Brown, beaten by a nose on English galloper Bauer in last year's Melbourne Cup.
"I've had to watch the replay of last year's race for a year and now I can forget about it. I've won the Melbourne Cup," Brown said.
It was more Melbourne Cup heartbreak for the global Godolphin stable with its third second-place finish in Australia's iconic horse race.
Crime Scene, Godolphin's only starter after deciding not to enter Kirklees, now joins Central Park (1999) and Give The Slip (2001) as the stable's runners-up.
Ridden by Kerrin McEvoy, Crime Scene looked set to draw away inside the final 200m (furlong) but could not go with Shocking and was well beaten at the post.
"One year we are going to win, I don't know when," trainer Saeed bin Suroor said.
"It was a great run by the horse. He showed a good turn of foot and if he stays sound, we'll bring him back next year."
McEvoy said he thought Crime Scene had a chance of hauling in Shocking in the last 200m.
"Shocking headed me at the furlong (200m) but my horse really let go well," he said.
"He ran the trip right out and I thought for a minute we were going to fight back, but the other horse obviously got the better of him. It was a good run and gave us a big thrill."
Mourilyan, trained by South African Herman Brown and ridden by Glyn Schofield, finished strongly out of the pack to grab the minor placing for his high-profile owner, Chechen leader Ramzan Kadyrov.
"Everything went to plan - the jockey rode a great race, he had every chance," Brown said.
"He just got held up a little bit into the straight and had to wait, which cost him a bit, but overall I'm very happy with his run."
Only three internationally trained horses have captured the Melbourne Cup - Vintage Crop (1993), Media Puzzle (2002) and Delta Blues (2006).
Australian galloper Alcopop started 15/4 favourite and finished sixth, just ahead of last year's winner and topweight Viewed (11/2).
Viewed was the best finisher of Bart Cummings' three starters as the legendary Australian trainer chased a record 13th Melbourne Cup victory in 44 years.
Roman Emperor (10/1) was up with the lead to the home turn but faded to finish 21st of the 23 starters, while Cummings' other runner, Allez Wonder (25/1), came in 16th.
"Never mind, we'll just have to come back next year," said Cummings, who turns 82 later this month.
Munsef, prepared by English trainer Ian Williams and sent out at 50/1, finished a well beaten 12th.
Newmarket trainer Luca Cumani, who finished second with Bauer and Purple Moon in the last two Melbourne Cups, was never a show with his 25/1 chance Basaltico finishing 18th.
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